It is coming to that time of year when deadlines for paying your tax bills are looming closer. All self-employed people will need to complete a self-assessment. Once you have filed your tax return you will get a detailed bill outlining the amount of tax you are liable for. Here we look at ways to pay Your Self-Assessment.
When do you need to Pay Your Self-Assessment
There are essentially two payment details for Self-Assessment. The first is on 31st January. For this deadline you will need to pay the tax owing on the previous tax year. This is the balancing payment. You will also need to pay the first payment for the next tax year. This is usually half of the expected tax bill for the following year.
The second payment deadline is 31st July. You will need to pay the second payment on account for the tax year you are in.
It is essential you pay HMRC within these timeframes. Failure to do so will result in interest being charged to your account. You may also incur a late payment fine from HMRC.
Different Ways to Pay Your Tax Bill
There are a number of ways you can pay your tax bill. These include: –
- Online banking – Same Day / Next Working Day
- Direct Debit – Up to 5 working days
- Bank Transfer – Same Day / Next Working Day (unless BACs which can take up to 3 working days)
- In Branch – Same Day / Next Working Day
- Cheque – Up to 3 working days
- Personal Debit Card – Same Day / Next Working Day
- Business Debit or Credit Card – Same Day / Next Working Day
It is important to be aware of how long each method of payment will take. Equally, you should allow extra time in case there is a problem with payment. You should check your online account to ensure the payment has successfully been made.
Paying Your Tax Bill In Installments
If you are unable to pay your tax bill can you can set up a payment plan to spread the cost of your latest bill. You will need to satisfy the following criteria to apply for a payment plan:
- Your tax bill is less than £30,000
- It’s less than 60 days after the payment deadline
- Your tax returns are completely up to date
- You don’t owe HMRC any other monies
If You Are Unable to Pay Your Tax Bill
If you know in advance you are unable to pay your Self-Assessment Tax bill contact HMRC to set up a Time To Pay Arrangement. Time to Pay is a service that HMRC offer to individuals and businesses to agree an alternative payment plan with HMRC.
If you would like advice on your tax affairs please contact us. Call us on 0800 471 4546 or you can contact us here.